CN and Arc Terminals building unloading terminal in Mobile, Ala.

Arc Terminals LP and Canadian National are working together to build a rail tank car unloading terminal in Mobile, Ala., to handle Western Canadian heavy and Bakken light crude oils destined to Gulf Coast refineries.

The CN-served facility, which will have a maximum crude-oil handling capacity of 75,000 barrels or up to 120 tank cars per day, is scheduled to start operation by June 2013. Initial volume is expected to be 40 tank cars of crude oil daily, increasing according to demand.

John Blanchard, president of Arc Terminals, said, "The Mobile facility, the first rail tank car crude-oil unloading terminal in Alabama, will provide good access to Gulf Coast refineries and allow quick turnaround of tank cars, increasing product delivery and fleet velocity and reducing costs for car owners.

"The rail transload terminal will handle heavy crude oil from Western Canada and light crude oil from the Bakken basin via CN, which will provide Canadian producers single-haul service to our Mobile destination. A single-line haul is more efficient and less expensive than those involving two or more rail carriers and multiple terminal switching."

The Mobile terminal will also load condensate into tank cars for backhaul by CN to Western Canadian oil producers.

In addition, it will be able to accommodate both general purpose and insulated and coiled cars, compared with other facilities capable of handling only general-purpose tank cars.

Jean-Jacques Ruest, CN executive vice president and chief marketing officer, said, "We are pleased to be an important supply chain partner for Arc Terminals. CN is focused on making its crude-oil customers more competitive and giving them access to markets with good net-backs. Crude oil by rail is one of CN's fastest growing businesses. We expect to move in excess of 30,000 carloads in 2012 and we believe we have the scope to double this business next year."

The Blakeley terminal has a storage capacity of 700,000 barrels for crude, fuel oil and asphalt. Terminal capacity could be expanded to more than one million barrels to meet potential future demand.